What has been the impact of the BoE's most recent asset purchases?

At its August meeting, the Bank of England's Monetary Policy Committee (MPC) halved the bank rate to 0.25% in addition to implementing a new Term Funding Structure and a purchase of up to £70bn UK corporate and government bonds.

This takes the total stock of asset purchases to £435bn. Going into the meeting, markets had fully priced the cut in the bank rate, but were taken by surprise by the scale and composition of asset purchases. The 10-year gilt fell by 15 basis points and subsequently recorded new lows of 0.51% on 10 August. Short dated gilts briefly traded in negative territory, despite bank governor Mark Carney stating that zero was the lower bound. The 9 August auction saw the Bank struggle to get investors in long-dated (over 15 years) to part with their bonds. This was the first time since the st...